UPDATE: J.P. Morgan Initiates Coverage on Hornbeck Offshore

According to a research report published earlier today, J.P. Morgan has initiated Hornbeck Offshore

with a Neutral rating and $50 PT. In the report, J.P. Morgan commented, “Although HOS is highly levered to the deepwater Gulf of Mexico recovery with one of the highest quality fleets of US-flagged offshore supply vessels (OSVs), we see limited upside to the stock at current levels. Fundamentally, we're highly supportive of HOS's strategy of continuing to improve its asset base through its recent newbuild program, but expect the recent equity raise to partially finance the newbuild capital outlays over the next several years to restrain returns, limiting valuation upside. In light of this and the stock's outperformance over the past 6 months (+69% vs. S&P500's +24%), we believe the stock is going take a breather until returns improve.” Hornbeck Offshore closed yesterday at $42.06.